He has been immersed in cryptocurrencies for the last five years and has followed the rise of electric vehicles for just as long.
Bitcoin is great for large transactions, but if you are using it to buy a cup of coffee—not so much.
In order to maintain the security and transparency on the Bitcoin blockchain, the blocks of data that make up the blockchain are quite small.
It is estimated that the Bitcoin blockchain can handle roughly seven transactions per second In comparison, Visa’s network can process up to 65,000 TPS for fractions of a penny.
Fortunately, developers in the crypto community have been aware of this limitation for quite some time.
This innovation allows payments to be tracked on a second layer and then added to the Bitcoin blockchain at a later date.
Similar to how users of Venmo or other digital payment apps give little attention to what goes on behind the scenes and trust the technology to settle payments, it is not necessary for users of the Lightning Network to be aware of what’s under the hood.
Since the channels exist outside the main Bitcoin blockchain, users can send and receive payments without having to pay a large fee or wait for verification on the Bitcoin blockchain.
The Lightning Network is an interconnected system that resembles something more like an electric grid with thousands of channels connecting thousands of users.
Instead of creating a new channel, the Lightning Network will transfer your payment through the existing pathway between your friend and the restaurant because your friend is a regular there.
Think of it as being similar to having a mutual friend of someone on Facebook.
As more people use the Lightning Network, more channels are created, which then causes the network to become faster and more expansive.
Simply connect a payment method, like a debit card, purchase some Bitcoin, and you can now send Bitcoin to anyone in the world with an internet connection—lightning fast and dirt cheap.